13th AHV pension: What the planned VAT covers – and what remains open
The extra pension is paid out in December. Voters decide on its partial financing only at the end of November.
Two decisions are often conflated in the debate about the 13th AHV pension. The first has already been taken: the additional old-age pension will be paid out for the first time in December 2026. The second is still pending: on 29 November, voters will decide whether value added tax should be raised to help finance the 13th AHV pension.
The payout of the 13th pension does not depend on that vote. The people and the cantons approved the corresponding initiative in March 2024. In December, around 2.6 million recipients of an old-age pension will receive the supplement. It equals one twelfth of the old-age pensions paid out over a year. Anyone not drawing an old-age pension in December will not receive it: survivors' pensions and IV (disability insurance) pensions continue to be paid twelve times a year. Supplementary benefits must not be cut because of the 13th old-age pension.
A partial financing, not a complete solution
The 13th AHV pension costs more than four billion francs in its introductory year. As part of regular AHV financing, the federal government covers a good fifth of these additional expenses. The extra financing decided by parliament is meant to close part of the remaining gap: the standard VAT rate would rise by 0.4 percentage points, from 8.1 to 8.5 per cent. The special rate for accommodation would go up from 3.8 to 4 per cent.
The reduced VAT rate, by contrast, would stay at 2.6 per cent. It applies among other things to food, medicines, newspapers, books and certain agricultural goods. Anyone buying food therefore pays no more VAT under this proposal. For a product or service at the standard rate, an invoice of 100 francs before VAT would be charged 40 centimes more. Whether and how a company passes that change on in a final price is a pricing decision of its own.
The tax increase is not yet in force. It will only come about if the people and the cantons agree on 29 November, and could apply from the start of 2028 at the earliest. For the 2026 and 2027 payouts there would therefore be no revenue from this extra financing.
What the figures mean for households
The Federal Social Insurance Office (BSV) expects the VAT increase to bring in around 1.4 billion francs a year from 2029. That reduces the AHV deficit, but it does not pay for the 13th pension in full. Without additional revenue, the federal government estimates the annual deficit in 2035 at almost five billion francs; with the planned increase, at around three billion francs.
For pensioners, the December date matters most. For working people and families, what counts is which expenses fall under the standard rate. The proposal as actually adopted contains no additional AHV payroll contributions. Anyone in work would therefore be affected through consumption, not through a higher AHV deduction on the payslip.
The vote thus does not decide whether the 13th AHV pension happens, but one building block of its financing. The remaining questions – such as the long-term stabilisation of the AHV from 2030 – stay on the political agenda. That makes the proposal neither irrelevant nor a complete solution: it is a clearly limited answer to a considerably larger financing task.